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TODAY'S OTHER NEWS

Rental supply crisis looms as landlords continue to exit the PRS

There has been a further increase in the number of landlords exiting the buy-to-let market, according to new research by the Residential Landlords Association (RLA). 

A survey of more than 2,700 landlords show that almost a quarter of respondents have seen the demand for private rented property increase over the last three months, with 41% saying there had been no change. Just 15% said that demand has dropped. 

With the study revealing that more landlords are selling properties than buying whilst demand continues to increase, the association is warning of a rented housing supply crisis ahead. 

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According to the research, over the next 12 months 31% of landlords plan to sell at least one property with just 13% saying they plan to buy at least one.

A shortage of private rented housing together with strong demand from tenants has led to rising rents across most parts of Great Britain.

ARLA Propertymark reports that rents in the UK’s private letting sector increased last month, albeit marginally, as the supply to let dropped again. 

The RLA is now calling on the government to adopt pro-growth measures including abolishing the stamp duty levy on the purchase of additional properties where landlords add to the net overall supply of homes available, including bringing long term empty homes into use.

David Smith, policy director for the RLA, commented: “Those who argue that a smaller private rented sector is good for tenants wanting to buy a home are plain wrong. 

“The government’s policies are choking off the supply of homes to rent whilst demand remains strong. This is only making life more difficult and potentially more expensive for those looking for somewhere to live.

“Without an urgent change of course and the introduction of pro-growth policies the situation will only become worse.”

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

Poll: Are you planning to sell at least one property over the next 12 months?

PLACE YOUR VOTE BELOW

  • Mark Wilson

    Probably good news for first time buyers and with conflicting data on what level rents are moving there may not be the shortage muted.

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    With all the changes the tax man has made i.e. a lot less tax breaks on mortgage interest.
    A big no no as I have interest only mortgages and that was okay until the taxman changed the goalposts when this decision was made decades ago.
    Extremely unwise of him!

    Well it isn`t worth the trouble anymore and I am cashing out for 1!
    Let the government look after the rental sector now, seeing has how they have forgotten to reward the no cost policing of the rental sector the private landlord does.
    Now the government want to stifle the entrepreneurs.
    So be it!
    Give me my hard earned money back and you can have the problem!
    Rightly or wrongly, I feel really really strongly about this.
    I have already sold 1 property and now I am making plans to sell my second and final property so I will be out of the rental market for good.

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    • 29 October 2019 09:17 AM

    I don't care whether rents are rising.
    They AREN'T rising enough to cope with all the increased cost burdens.
    The only thing keeping the PRS from imploding is low IR.
    If they increased along with the already increased cost burdens they would bankrupt me.
    So I am getting out one property per tax year!
    This is what most LL will be doing.
    Some might not need to sell as they will change the property business model from AST letting to something else like AirBnB; SA or FHL.
    But there will be a progressive decline in the numbers of rental properties available to rent on an AST.
    Few LL especially in the SE will wish to realise CGT by selling.
    Of course if the evil Labour Party attain power then it will truly be Armageddon for the PRS!!
    Fingers crossed everybody!!

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    I have two sold sold two last year and am off loading more in bite size chunks and am investing in a holiday let in Portugal with a view to moving when my kids are grown up. I have 80 so will take time but I am so depressed and angry about how we are being treated by all authorities it’s just not worth it anymore. I will leave me high 12% Yield portfolio as income

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    • 29 October 2019 09:35 AM

    Portugal is currently very welcoming to Brits and their monies especially if investing in property.
    They gave a very advantageous 10 year tax policy which absolutely incentives Brits to invest in the Portuguese property market.
    Also NO chance of your property being bulldozed unlike in Spain!!
    The Portuguese love the Brits
    Also no terrorist bombings have ever occurred there.
    There are no Muslim idiots there trying to impose their way of life on the Portuguese.
    So a safe country to be.
    The Algarve and it's hinterland is an extremely attractive proposition and I can see a lit of Brit LL moving from AST letting in the UK to similar investing in Portugal.
    The only downside to this is I've heard it is a nightmare to get rid of rent defaulting tenants.
    So need to tread carefully!!

     
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    I don't have any borrowings and most were purchased in the 90s, so I'm sticking with it for now, but at 66 who knows what the future may hold for me.

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    Looking for properties to invest in BTL. Prefer London and surrounding areas. Please feel free to email details svraman8@gmail.com

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    I am sticking with my 4 BTL's I am still a standard rate tax payer and have not seen any changes for me.
    I have set my rents and am happy with them
    Any costs the government put on me are passed on to tenants,for example when electric testing comes in,will be passed on.
    This government should reward good landlords(who have paid tax from day one) and keep their properties in a good state,with incentives and allowances to keep the properties available to rent.
    Landlords from hell should be shut down now and a stop to taring all landlords with the same brush!
    I know I am a good landlord and attend to any problem right away ! my tenants love me and I do them.

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    • 29 October 2019 10:48 AM

    I'm afraid no matter how good you are you are still scum as far as councils and Shelter are concerned.

    You'll get no thanks for being a good PRS LL.
    It is unlikely that you will be able to achieve higher rents as I am already getting pushback from tenants on increases which will make my properties unviable.
    The increased cost burdens really are affecting business viability for mortgaged LL.
    I have 3 voids all at the same time......................it can happen!!
    I'm not backing down on required rent or I end up being a charity.
    That is NOT why I became a LL!!

     
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    That is a good point about standard rate tax. It does mak a a marked difference to profitability. Ok their is profit and PROFIT but I have cancelled any ideas of being a property magnate and have very little borrowing. If any tenant leaves now we will sell but, touch wood, we have a great bunch. We have had bad and very bad but with the laws changing we have had enough of that. It is better to loose some money selling rather than than have an immoveable bad tenant to look after.

     
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    The costs are now too high for most BTL to be viable. I don't see how rents can be increased sufficiently, already tenants may be paying 50% or more of their income in rent, then they've got to pay council tax, utilities, food, transport, etc. I have reduced to 3 BTL from 4, they are returning average 4.5% before costs and tax. Last year I had a lot of maintenance costs so worked out I was down to about 2% pre tax. The only thing that makes it worthwhile is if you get capital increase.

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    • 29 October 2019 19:28 PM

    I believe your story is very representative of a lot of LL.
    Few recognise that a substantial portion of mortgaged LL are teetering on the edge of viability and this is with S21 still being available and no Labour Govt!!
    I don't believe tenants are aware of how parlous things are for their mortgaged LL especially if a sole trader.
    The PRS hasn't been in such a bad situation since the 70's.
    This is before S21 abolishment and a possible Labour Govt.
    Mortgaged sole trader LL comprise 25% of the PRS.
    This is a significant percentage.
    Losing all mortgaged sole trader LL would be devastating for millions of tenants.
    There would also be substantial pressure on the small mortgaged corporate LL who whilst not subject to S24 are still subject to all the other cost pressures that all other LL are subject to.

     
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